Managing casual retainers in light of recent legislative amendment

Journal,  Principals

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Amendment Act), which came into effect on 27 March 2021, introduced numerous changes to employers’ obligations concerning the appointment and retention of casual employees.

Principals of real estate agencies are urged to review their current practices pertaining to the recruitment and retention of casual employees to ensure that they remain compliant.

Who is a casual employee?

The Amendment Act seeks to resolve the previous uncertainty which had existed with respect to the classification of casual employment.

Helpfully, section 15A of the Fair Work Act 2009 (Cth) (FWA) now defines ‘casual employee’ as being a person who is offered employment without ‘firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person’ and who accepts the offer of employment on those terms.

In determining whether there is ‘no firm advance commitment to continuing and indefinite work’, regard must be had only to the following considerations:

  1. whether the employer can elect to offer work and whether the person can elect to accept or reject work;
  2. whether the person will work as required according to the needs of the employer;
  3. whether the employment is described as casual employment;
  4. whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.

Critically, the determination of casual employment will now be assessed by reference to the terms of the offer of employment which is made and accepted, rather than any subsequent pattern of work.

Casual Employment Information Statements

The Amendment Act introduced the newly inserted section 125B into the FWA which requires employers to provide a Casual Employment Information Statement (CEIS) together with the updated version of the Fair Work Information Statement (FWIS) to all casual employees who were engaged prior to 27 March 2021, and all newly commencing casual employees.

Employers will already be familiar with the FWIS which provides information about an employee’s minimum pay rates and conditions of employment.

The CEIS is also an approved document published by the Fair Work Ombudsman which contains information about the rights and obligations attaching to casual employment.

The CEIS includes information concerning:

  • the new statutory definition of a ‘casual employee’;
  • when an employer must offer a casual employee a conversion to permanent employment;
  • when an employer will not be required to offer a conversion;
  • when an eligible employee may seek a conversion to permanent employment;
  • how a small business employer’s conversion obligations differ to other employers; and
  • the role of the Fair Work Commission in dealing with disputes pertaining to casual conversion.

Employers’ obligation to offer conversion

The FWA also imposes certain obligations pertaining to casual conversion to permanent employment. However, the conversion obligations for small business employers differ to those of other employers (who employ more than 15 employees).

Small Business Employers

Small business employers are required, as soon as practicably possible, to provide their casual employees with a CEIS.

There is no obligation upon small business employers to offer conversion, however, they will be required to respond to an employee’s request for conversion in the manner prescribed by the Act (see below).

Other Employers

Unless reasonable grounds exist to justify not offering conversion, all other employers (excepting small business employers) must offer casual employees a conversion to permanent part-time or full-time employment once they have been employed for at least 12 months and where, during the last six months of that period, they have worked a regular pattern of hours which could be continued as a full-time or part-time engagement.

The Amendment Act includes a list of factors which may constitute reasonable grounds for not converting a casual employee’s employment, including:

  1. the employee’s position will cease to exist in the period of 12 months after the time of deciding not to make the offer;
  2. the hours of work which the employee is required to perform will be significantly reduced in that period;
  3. there will be a significant change in either or both of the following in that period:
    • the days on which the employee’s hours of work are required to be performed;
    • the times at which the employee’s hours of work are required to be performed;

which cannot be accommodated within the days or times the employee is available to work during that period; and/or

  1. making the offer would not comply with a recruitment or selection process required by or under a law of the Commonwealth or the relevant State or Territory.

Employers must, by 27 September 2021, assess whether any existing casuals who were employed before 27 March 2021 are eligible to convert to permanent employment.

Within 21 days of conducting that assessment (but before 27 September 2021), the employer must make a written offer to the employee of permanent employment or otherwise provide a written explanation as why such an offer cannot be made.

An employee is required to provide written notice of their acceptance of the offer of conversion within 21 days, failing which the offer will be deemed to have been declined.

Employers should implement a system to ensure that similar assessments are undertaken for all casual employees who have commenced work after 27 March 2021, at the expiration of their initial 12 months of service.

Employee requests for conversion (applicable to all employers)

Should an eligible casual employee request that their employment be converted to a permanent part-time or full-time position, the employer must provide its written response to that request within 21 days to confirm whether or not the conversion will be accommodated.

If the employer refuses the request, it must provide written reasons for declining to convert the employment to a permanent position. Relevantly, an employer cannot refuse a conversion request unless it has consulted with the employee and can adequately demonstrate reasonable grounds for the refusal.

Principals seeking to refuse a request are urged to seek legal advice prior to determining whether reasonable grounds exist.

Dealing with disputes

Any disputes which arise in relation to casual conversions which cannot be resolved directly between the parties may be referred to the Fair Work Commission.

Key take-aways

As a six-month transitional period applies, employers are urged to assess their recruitment processes to ensure that they are compliant with the newly introduced legislation pertaining to casual retainers.

In particular, employers should:

  • Take steps to ensure that a copy of the CEIS is issued to all new and existing casual employees (and retain evidence of that document having been provided).
  • Ensure that the terms of all offers of casual employment and the terms of all casual employment agreements properly reflect the new statutory definition of casual employment.
  • Undertake regular reviews of all casual employees’ positions to determine whether conversions to permanent employment ought to be offered.

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